Fraud by landlord?

mel19632

Sorry to everyone who got upset about my postings about LHA before, but another quick question to all you knowledgable landlords.

Have heard "rumours" that a landlord I know is doing the following:

Has found out the maximum LHA allowance in the area and has "set" the rent at this level according to council. However, as the tenant is not in receipt of full LHA, he has agreed to lower the top up amount due of £250 to £100.

The reason he has done this is to get as much LHA as possible, but to keep the tenant happy because they are a good one. Obviously tenant and landlord are both happy.

I am HORRIFIED about this - is this not fraud? Surely its is overclaiming LHA (however I do not know how LHA is calculated, but assume it must take into account rent at some point...)

The LL however, seems to think it is perfectly acceptable as it is only diddling the state, and not hurting him directly.

What do you other LL think? I hope this is not common practise?

If what I have written doesn't make sense please let me know.

Thanks

Alias_Omega

i think its a good idea..

mel19632

Alias_Omega, i'm not sure if your joking.

What would happen when/if LL/tenant gets caught out?

epz_2

i dont know much about LHA rules but how is it any different from a normal landlord landlord asking as much rent as possible but reducing it after negotiation.

the problem seems to be people in receipt of full benefits have no incentive to negotiate rents down or the imagination to look for somewhere that gets them more for the governments money

real1314

hmm, so the question is, what exactly do you mean by saying that the tenant is not getting the full LHA? Is that because they have income that reduces their entitlement or some other reason?

tenants on income support can have up to £15 per week of LHA in excess of their rent disregarded. Anything over that *should* affect their IS.

e.g Rent £95, LHA £110, Tenant gets £15 extra, all ok.
Rent £90, LHA £110, Tenant gets £20 extra, IS reduced by £5 a week.

Not seen it done in practice yet, not sure exactly how it'd be dealt with.

poppysarah

I think LHA is open to abuse. I suspect HB costs are going to go up like mad. Costs tax payers massively. Well done nulabour.

Low rents are essential if the economy is to recovery.

lil_me

There does seem to be a lot of landlords who do this, set rent at highest LHA level. Unfortunately many tenants live in a property larger than LHA states they need, so they end up coughing up even more than they should have to in 'top up'.

What annoys me the most is it puts people off getting back into employment because the rent is so high!

RecoveringAlcoholic

many tenants live in a property larger than LHA states they need,

Agreed........................

j-baby-scotland

real1314 wrote: »

hmm, so the question is, what exactly do you mean by saying that the tenant is not getting the full LHA? Is that because they have income that reduces their entitlement or some other reason?

tenants on income support can have up to £15 per week of LHA in excess of their rent disregarded. Anything over that *should* affect their IS.

e.g Rent £95, LHA £110, Tenant gets £15 extra, all ok.
Rent £90, LHA £110, Tenant gets £20 extra, IS reduced by £5 a week.

Not seen it done in practice yet, not sure exactly how it'd be dealt with.

As I understood it a 'cap' was put on the LHA above rent payable at £15 per week.
Your reply seems to contradict this?
If the difference was greater than the allowed £15 I thought it was non-applicable. Where do you get your info if I can ask?

lil_me

The cap is on the LHA I believe rather than the IS. Noone I have come across so far has an award higher than their rent, most have a large topup to pay.

tbs624

lil_me wrote: »

There does seem to be a lot of landlords who do this, set rent at highest LHA level. ...!

but the LHA figure is set at the median point for properties of the same size within the Broad Rental Market Area, so these LLs are not charging the highest market rents for a property of that particular size..